We’re hooked. How the new wave of experience-economy brands are conquering the world. #GoPro #TomTom #Amazon #Aliexpress

August 2, 2016

GoPro is missing out. TomTom got it wrong. Amazon is tied to an old principle. And Aliexpress has been hugely underestimated.

Hi, my name is Brant, and I am hooked on experiences. And so are you.

New businesses are taking this credo to heart and designing their brands from the ground up around a very different model of consumer involvement, with a very different approach to generating revenues. You may be surprised who’s doing it well too.

Now, most of you reading this will know what the experience economy is – it’s not a new concept but has been steadily gaining traction since 1998. It was first coined by B. Joseph Pine II and James H. Gilmore, who position it uniquely as ‘Commodities are fungible, goods tangible, services intangible, and experiences memorable.’

Pine and Gilmore state that experiences are not the experiential wrappers added around existing products or services, like airlines with their plush new business class and first class offerings or Domino’s pizza ordering app that shows every step your pizza takes. They are not just the naturally ‘experience-heavy’ sectors like entertainment, e.g. theme parks, museums, cinemas and VR cinemas. Experiences are ‘inherently personal, existing only in the mind of an individual who has been engaged on an emotional, physical, intellectual, or even spiritual level.’ Or are they?

Experiences are Best Shared

So – why is laughter contagious? Why has GoPro created a revolution in social connection? Why do we watch how others’ respond to art in galleries as much as we look at the art itself? Because emotions shared create stronger and more intense experiences. We are social creatures, we mimic emotions as we grow to understand them and so shared, group experiences become great ways to fully understand what it is to be human and to revel in everything that makes us happy.

Why have festivals exploded in popularity? In the Netherlands alone, we’ve had a 600% increase in music festivals in the last 8 years. The complete range of sensory input helps – but being in a crowd of strangers all passionate about doing the same thing, sharing the same experience, is incredibly freeing, exciting and rewarding – by the end, you feel bolstered in yourself and feeling more positive in your belief in humanity. Even though many go with groups of friends, you make new friends, even if just ‘festival romances’. The entire experience is fun, empowering and inspiring.

Yes, every experience is personal – that’s obvious, we’re individuals – but the fact is we enjoy them more when we can share them, relate them, and experience social approval of our interests.

There’s no Price on Experience: The New ‘In-Experience’ Business Models

GoPro fostered the sharing of real experiences – being the first to do so, it has defined the category, creating an unassailable position. However, the business model is product based. To me, it seems there’s a huge untapped potential for their brand.

Look at gaming – MMPORGs redefined what it meant to be ‘a gamer’. Suddenly, it was social, you were not alone, and the experiences quite literally became boundaryless – the game realms were now universes. On top of this, game companies were the first to realise that with an experience, traditional business models just didn’t work. They created models that placed individualism first – some people will pay to enter but want to earn their way through a game, much like life, whilst others will happily pay to take shortcuts or to enjoy ‘exclusive’ experiences. Socially designed in-game purchases based around consumer behaviour has redefined gaming revenues. Gamers started trading virtual goods for real cash, the game companies embraced it. Gamers wanted to feel real emotions – how about really losing 300,000 dollars in virtual battles? Then with Pokemon Go, they bring all of this into the real world – even better.

It’s just like real life. Don’t construct your experience offering based on linear ideas of start and finish, construct it around increasing the experience. It’s quite a simple idea, but requires a profound shift in thinking in order to be executed effectively.

For GoPro – new competitors like TomTom’s Bandit are luckily getting it wrong. It’s not the camera that people are buying, it’s just the most ‘low risk’ key to entering a new world of shared experience. The brand is defined by the community: because most new customers come into first contact due to shared videos and experiences, they are buying into that potential. You don’t compete with GoPro by launching a camera. You can only compete with GoPro by rethinking from the ground up what the total experience is and how you can improve it. And GoPro seem unaware of it themselves, because they seem willing to leave the experience element in the hands of others – Youtube, Google, Facebook, etc. If they really looked at it from an experience economy perspective – they would see ways to create new value, for them and for their consumers.

Who’s Doing it Right?

Well, in a category that might surprise you, Aliexpress.

Have you ever used Aliexpress? I do, I first started out of academic interest and was astonished by the lack of a clear customer journey. Aliexpress threw everything at you – gamification, reviews, best buys, group deals, flash (scarcity) deals, curated content, bloggers, competitions, and on and on. I thought it was just an experimental way of developing a service… and then I realised: it’s an experience. When you drop the idea of servicing a need or want, of helping facilitate people to go from A to B, of a linear journey, you see that an experience is amorphous, it’s boundaryless, it’s giving freedom to explore, but also guidelines and anchors for people to quickly orientate on. And combined with the right ground-up systems of implementation like Agile, responsive development, and lean processes… Experiences are much more powerful.

For example, Aliexpress lets people add photographs to reviews and people liked doing it. So Aliexpress created a distinct category on their app called ‘Photo Reviews’ – and it went crazy and spawned an entire sub-culture. Unsurprisingly, the most popular images are of young women modelling their new purchases. Excusing the to-be-expected adolescent responses, because Aliexpress only allows reviews from actual consumers, it’s created an engaged community of people who love to show off their style, themselves and their interests in a way that is directly linked to platform consumption. Online commerce went from boring service, to a fun, sometimes silly, but yet inclusively-comforting group experience.

People look at Alibaba and Aliexpress and dismiss its explosive growth out of hand ‘oh it’s because it’s got the Chinese market.’ You know, it wasn’t the first nor the only online commerce platform in China right?

When you look at Amazon, you see clearly that the model is based firmly on the principle of service: ‘consumers have a need and we connect you to the resolution of that need as efficiently as possible.’ And this is why it’s growth has been limited. Service brands always find it hard to grow because unless you were really a poor service provider, creating new service elements that generate enough perceivable value-add to warrant higher expenditure, consistently, is pretty damn hard. Also, Amazon works on the assumption that all commerce is based on realised needs or wants, ‘I want this book on management.’ Yes if people know what they want, a fast, efficient service is perfect. But for many, consumption is an experience in itself, and thus highly individual, and platforms like Amazon are actually forcing consumers to adapt to their process, rather than the other way round.

Though Aliexpress definitely has some way to improve, their approach is clearly not to focus on providing a single path from A to Z, but to create a new shared shopping experience – they have succeeded in bringing the ‘browsing around the shops / mall in town’ experience online. The key challenge for Aliexpress is to see whether price is an inelastic and immovable component of that experience or not.

On the other hand, I’d keep an eye out for Aliexpress Dating, Aliexpress Market (for consumer to consumer sales) and Aliexpress Donate… because there are no rules, that’s the point.